CHS Inc., the nation’s leading farmer-owned cooperative and a global energy, grains and foods company, today reported net income of $346.7 million for the first half of its 2018 fiscal year (six-month period ended Feb. 28, 2018), compared to net income of $223.7 million for the same time period a year ago.

Consolidated revenues for the first half of fiscal 2018 were $14.9 billion, down from $15.4 billion for the first half of fiscal 2017. Pretax income was $185.0 million and $249.1 million for the first half of fiscal 2018 and 2017, respectively.

“CHS made meaningful progress in the first half of fiscal year 2018 as we continue to position CHS for higher performance,” said CHS President and CEO Jay Debertin. “The global environment for our businesses serving agriculture remains challenged and we continue to drive towards our priorities of better efficiency, strengthening relationships, and a more focused business portfolio. We have more work to do and we are seeing improvement that will make us a stronger company.”

For the second quarter of fiscal 2018 (Dec. 1, 2017 through Feb. 28, 2018), CHS reported net income of $166.7 million compared with earnings of $14.6 million for the same period in fiscal 2017. Revenues for the second quarter of fiscal 2018 were $6.9 billion, down from $7.3 billion for the second quarter of fiscal 2017.

Results for the quarter were attributed to:

Increased margins at the Company’s refineries.

Decreased volumes and margins within the Ag segment.

A significant tax benefit recorded during the quarter related to the Tax Cuts and Jobs Act of 2017.

For the first half of fiscal 2018, reporting segment results include:

Energy

Energy generated pretax income of $122.1 million during the first half compared to $86.6 million during the same period last year.

The Ag segment, which includes domestic and global grain marketing and crop nutrients businesses, renewable fuels, local retail operations and processing and food ingredients, generated pretax income of $43.6 million for the six months ending Feb. 28, 2018. That compares to $99.9 million for the same period the previous fiscal year.

The $56.3 million decrease was primarily the result of a decline in grain and oilseed volumes in the grain marketing and country operations businesses, and lower prices across the majority of the Ag sub-segments.

Nitrogen Production

This segment is comprised of the Company’s investment in CF Industries Nitrogen, LLC (CF Nitrogen) and generated pretax income of $10.2 million during the first half of fiscal 2018 compared to $32.4 million during the same time in fiscal 2017.

The $22.3 million decrease in earnings was primarily due to a gain in fiscal 2017 of $29.1 million associated with an embedded derivative asset that did not reoccur in fiscal 2018. This was partially offset by improved prices on urea, produced by CF Nitrogen.

Corporate and Other

This category is primarily comprised of the company’s wheat milling joint venture (Ardent Mills), its investment in Ventura Foods, LLC (Ventura Foods) and its financing, hedging and insurance operations. Corporate and Other generated pretax income of $9.1 million in the first half of 2018 compared to $30.2 million for the same period of fiscal 2017.

The $21.1 million decrease was due to reduced interest revenue from the company’s financing business resulting from the sale of loans receivable and lower earnings from our investment in Ventura Foods.